U.S. Corporate Earnings Whipsawed by Yen’s Drop

Senior Editor

U.S. companies that do significant chunks of their business in Japanese yen are starting to see some serious costs associated with the currency’s recent decline.

“It’s having a significant top line and bottom line impact,” Wolfgang Koester, chief executive of foreign exchange risk-management company FiREapps told CFO Journal. While companies have spent much of the past year focused on protecting themselves from fluctuations in European currencies, the impact of the dollar-yen exchange rate over the past quarter has taken some companies by surprise, and could worsen if companies fail to put in hedges to absorb some of the impact, Mr. Koester said.

Nearly across the board, mid-market executives are hiring new employees, buying new technology solutions, acquiring businesses to reach new markets and preparing IPOs, according to a Deloitte survey of more than 500 mid-market executives. But companies are running up against a number of constraints as they seek to expand, particularly in acquiring and retaining skilled talent.